Dow finished up only 28 after a strong performance for most of the session, advancers over decliners 3-2 & NAZ gained 109. The MLP index was even in the 234s & the REIT index rose 5+ to the 405s. Junk bond funds were pretty much even & Treasuries had limited selling, bringing slightly higher yields. Oil was off 1+ to the 79s & gold was flattish at 1930 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
An inflation gauge closely watched by the Federal Reserve showed signs of slowing in Dec, but it still remained abnormally high, according to new data. The Personal Consumption Expenditures (PCE) index showed that consumer prices rose 0.1% from the previous month & rose 5% on an annual basis, according to the Bureau of Labor Statistics. Core prices, which strip out the more volatile measurements of food & energy, climbed 0.3% from the previous month & 4.4% year over year. Those figures are both in line with forecasts. While the Fed is targeting the PCE headline figure as it tries to wrestle consumer prices back to 2%, Chair Jerome Powell previously told reporters that core data is actually a better indicator of inflation. Both the core & headline numbers point to inflation that is running well above the Fed's preferred 2% target, a troubling sign as the central bank is already hiking interest rates at the fastest pace in decades. Policymakers have already approved 7 straight rate hikes, pushing the federal funds rate well into restrictive territory. The central bank has signaled that it will raise rates higher than previously anticipated, though it plans to pause the increases at some point in 2023. "We've continually expected to make faster progress on inflation than we have," Powell told reporters last month. "That's why the peak rate for this year goes up between this meeting and the September meeting. You see the fact that we've made less progress than expected on inflation." In a potentially worrisome sign, the report suggested that uncomfortably high inflation combined with steeper interest rates are finally beginning to weigh on consumer spending. Spending climbed fell 0.2% in Dec from the previous month, compared with a decline of 0.1% in Nov.
The Fed's favorite inflation gauge cooled in December, but prices remain high
Chevron (CVX), a Dow stock & Dividend Aristocrat, posted a record $36.5B profit for 2022 that was more than
double year-earlier earnings, but the bottom line fell shy of estimates, undercut by asset writedowns & rising costs. The oil producer's adjusted net profit for 2022
exceeded its previous record set in 2011 by about $10B. Still,
higher expenses & weaker oil & fuel profits left Q4
earnings 6.6% below the forecast. The White House protested CVX's decision to triple its
spending on share repurchases, now at $75B over 5 years at
current guidance. Shareholder rewards will continue to be the top priority for cash, CVX officials said. “We
can do it all,” finance chief Pierre Breber said. After providing for shareholder dividends, CVX will
allocate cash to production & repaying debt, with share buybacks a 4th priority. This year, it will increase project expenditure to $17B, with 2/3 of outlays in the US, where oil & gas output was
up 4% over 2021. It left global oil & gas production guidance for this year at flat to up 3%. CVX has been shifting its focus for new investments & targeting
production in the US. US production hit a record last year,
led by a 16% increase in Permian, the country's main shale basin. The stock dropped 7.16 (6%).
If you would like to learn more about CVX, click on this link:
club.ino.com/trend/analysis/stock/CVX_aid=CD3289&a_bid=6ae5b6f7
Chevron annual profit doubles to record $36.5 billion, but fourth-quarter miss hits shares
The Food & Drug Administration's (FDA) independent advisory committee recommended replacing Pfizer (PFE) & Moderna's (MRNA) original Covid vaccine used in the US for everyone's first 2 immunizations with the new bivalent omicron shots. If the FDA accepts the advisors' recommendation, the US would likely phase out these vaccines developed in 2020 against the original Covid-19 strain. Instead, the bivalent omicron shots that target the omicron BA.5 subvariant as well as the original strain would be used for the entire vaccination series. Currently, PFE's & MRNA's omicron shots are only authorized as a booster, while the first 2 doses are still their old shots based on the original Covid strain. The 21 members unanimously backed the proposal, agreeing that it would simplify the US Covid vaccination program. “This is absolutely the right thing to do for the program. It will make things simpler,” said Dr Melinda Wharton, a senior official at the National Center for Immunization & Respiratory Diseases, a division of the Centers for Disease Control & Prevention. The proposed change would only affect people who have not yet received their 2-dose primary vaccination series. No timeline was provided on when this switch might occur if the FDA accepts the panel's nonbinding recommendation. The recommendation to adopt a single formulation across all doses comes as the FDA is trying to streamline Covid vaccination so that the system is easier for the public & health-care workers to understand. “The overall thought here is that getting towards one vaccine composition for everyone will ultimately be much, much more helpful,” said Dr Peter Marks, who heads the FDA's vaccine division.
FDA advisors recommend replacing original Covid vaccine with omicron shots
Gold futures finished slightly lower, but tallied a 6th weekly gain in a row after touching their highest level in 9 months earlier this week, as the latest reading on US inflation met with most market expectations. Gold prices for Feb fell pennies to settle at $1929 an ounce, with the most-active contract up a smidgen for the week. Prices, which traded at a 9-month high earlier in the week, marked a 6th straight weekly gain — the longest such streak of gains since Aug 2020.
Gold Futures Slip but Tally a Gain for a Sixth Consecutive Week
Oil futures ended with a loss,
with US benchmark prices under $80 to settle at their lowest in more
than a week. US crude prices are having a little tug-of-war around the $80 a
barrel level until the market knows more about China's reopening
momentum, what the Federal Reserve will do to the economy & what OPEC+ will decide to do with production quotas. US benchmark West Texas Intermediate crude for Mar declined by $1.33 (1.6%) to settle at $79.68 a barrel, the lowest front-month contract finish
since Jan 18.
U.S. oil prices settle at their lowest in more than week
The Dow had a good week, up about 600. However, in the earnings reports there were many worries about the outlooks for this year. Even if the inflation indices are showing lower numbers, consumers still have to pay significantly higher prices which could pinch retail sales.
Dow Jones Industrials
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